In July 2020 Ethical Consumer searched the Tesco Plc website for information regarding its supply chain management. A number of web pages were viewed including 'Our Approach to Human Rights' dated 27/05/2020 ; Modern Slavery Statement 2019/20 and an undated page titled 'Human Rights' found under the sustainability section of the website.
Supply chain policy (reasonable)
The ‘Our Approach to Human Rights’ stated that the company was committed to upholding human rights and fully support the UN Universal Declaration of Human Rights, the International Labour Organization Core Conventions and the UN Guiding Principles on Business and Human Rights.
It stated that the company expected all its suppliers to meet the standards set out under the Ethical Trading Initiative Base Code, of which Tesco was a member. It listed some but not all the standards, including adequate clauses on freedom of association, prevention of discrimination and forced labour. The 'Human Rights' page stated "We are also committed to reporting regularly on our work to uphold human rights in our supply chains. For our supply base specifically, we require that our suppliers uphold the full range of labour standards set out in the Base Code of the Ethical Trading Initiative". The standards included adequate clauses on freedom of association, living wage, hours in a working week, prevention of discrimination, child labour and forced labour. However, it was not made clear whether this requirement applied to any second tier suppliers. Tesco was considered to have a reasonable supply chain policy.
Stakeholder engagement (good)
Tesco was a member of of the Ethical Trading Initiative (ETI)
The ‘Our Approach to Human Rights’ stated that the company had developed a ‘due diligence’ approach to managing supply chain issues; stating that it consulted over fifty internal and external stakeholders, including suppliers, multi-stakeholder bodies including "including suppliers, multi-stakeholder bodies such as the Ethical Trading Initiative, trade unions, civil society groups such as Unseen and Oxfam and government bodies". High risk areas of the company’s supply chain were identified through this process, and were used to target and reduce risk. Ongoing dialogue with NGOs, trade unions, multi-stakeholder groups and other organisations was said to be a key part of this due diligence process and Tesco reported annually to the Ethical Trading Initiative regarding its performance against its plan, risks and trends. The report was then said to be scrutinised by Trade Union and NGO members of ETI (members include the Trades Union Congress, Oxfam and Anti-Slavery International) and feedback was provided to help Tesco PLC review and improve. This human rights supply chain programme was said to cover everything sourced for own label, including Tesco-exclusive brands, services and goods.
It stated that workers in Tesco’s ‘first tier’ supply base had access to a confidential, independently managed Protector Line. Workers in lower tiers could also use the line and all concerns were said to be investigated, but it was not communicated directly to these workers. Complainants could use their own language and the line had free phone number as well as an online system. Tesco also stated that it had on the ground teams to further support this system.
Tesco was considered to have a good approach to stakeholder engagement.
Auditing and reporting (rudimentary)
A webpage was viewed, titled 'Our approach to Human Rights'. The page stated: "Ethical auditing is predominantly focused on the ‘first tier’ of the supply chain, i.e. sites producing the final product, such as a clothing factory or food manufacturing plant. High risk sites must have an audit before supply and then on an annual basis [...] We also audit beyond first-tier based on the risk of the products being produced". Tesco was considered to have a commitment to audit an acceptable portion of its supply chain including some depth. While there was a clear schedule for first tier suppliers in high risk countries it was not clear how often other suppliers, for example second tier suppliers or suppliers in lower-risk countries.
Tesco stated that it supplied audit results to Sedex but did not appear to have published audit results at factory level. Ethical Consumer expected companies to cover the cost of audits but could find no statement from Tesco about who paid for audit costs.
The webpage also outlined a staged policy for non-compliance, including requiring an independent audit to ensure that the supplier had completed all actions in its Corrective Actions Plan.
Tesco was considered to have a rudimentary approach to auditing and reporting.
Difficult issues (reasonable)
Ethical Consumer deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.
Tesco PLC discussed its approach to developing long-term, stable relationships with suppliers, particularly in certain sectors, for example bananas.
Tesco discussed the use of semi-announced audits to avoid audit fraud and also stated: " In addition, we sometimes make entirely unannounced visits if we have particular concerns, including to validate audit findings".
The 'Our Approach to Human Rights' also stated that it provided key performance indicators to suppliers which included "Actions and support being provided on worker representation and farmer organisations" and the ETI basecode which Tesco required suppliers to adhere to stated that in cases where freedom of association is restricted by law suppliers must find alternative means.
The modern slavery statement 2019/20 stated that it had ongoing training for staff on modern slavery.
There did not appear to be a discussion of living wages beyond its inclusion in the ETI basecode.
The company was considered to have a reasonable approach to difficult issues overall.
Overall Tesco PLC received Ethical Consumer's best rating for Supply Chain Management.
www.tescoplc.com (21 July 2020)